(2022-11-23-ны өдрийн орчуулга)                                         Unofficial translation

LAW OF MONGOLIA

October 20, 2011                                                                                      Ulaanbaatar city

ON CREDIT INFORMATION

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of the Law

1.1.The purpose of this law is to regulate the relations concerning the building of credit databases, processing, preserving, safeguarding, and usage of credit information, providing credit information service for users, licensing of credit information operators, and the revocation and monitoring of licenses.

Article 2.Legislation on Credit Information

2.1.Legislation on credit information consists of the Constitution of Mongolia, Civil code, Criminal code, Law on Central Bank /Mongolbank/, Law on Banks, Law on Protection of Personal Data, and Law on Organizational Secrets, this law and other legislative acts enacted in conformity with these.

/The amendment to this paragraph was made according to the law as of December 17, 2021/

2.2.If an international treaty, to which Mongolia is a party, provides otherwise than this Law, the provisions of the international treaty shall prevail.

Article 3.Scope of the Law

3.1.This law shall apply to build, use, and monitoring of a database of monetary payment obligations arising in connection with loans and payments between banks, non‐bank financial institutions, savings and credit cooperatives, natural persons, and state- or privately-owned legal entities provided in this law and contract.

Article 4.Terms and definitions

4.The following terms used in this law shall have meanings as follows:

4.1.1."Credit information" means information about the credit and payment status of a borrower who legally and contractually has obligations before a lender;

4.1.2."Credit database" means credit information of borrowers held by Mongolbank and credit information service provider;

4.1.3."Borrower's consent" means a document by a borrower that consents to provide information provided in Article 6 of this law to the credit information service provider;

4.1.4."Build credit database" means the processing of credit information by collecting, modifying, updating and amending the data based on the grounds of the law and contract;

4.1.5."Credit information service provider" means a for‐profit legal entity that obtained a license from Mongolbank to conduct credit information operations;

4.1.6."Borrower" means an individual or legal entity that has credit and payment obligation to the state, business entity, organization, individual and legal entity according to law and effective contract;

4.1.7."Lender" means a bank, non‐bank financial institutions, and savings and credit cooperatives; and an individual or legal entity that is entitled to demand the fulfillment of credit and payment obligation from borrower according to law and effective contract;

4.1.8."Information supplier" means a lender or state agency that supplies borrower's information on credit and payment obligations to the credit information database according to the contract made with the credit information service provider;

4.1.9."User" means an information supplier, an individual, a legal entity, and a borrower who requested to receive the information based on a contract made with a credit information service provider;

4.1.10."Contract to receive or provide information" means any contract made between information supplier, user, and credit information service provider concerning on supply of information regarding credit and payment of the borrower to the credit information database and/or receiving information from the database;

4.1.11."State agency" means Mongolbank, Financial Regulation Committee, the state administrative body in charge of registration of individuals, legal entities, and property, tax, social insurance, customs and energy authorities or the Court Decision Enforcement Authority;

4.1.12."Credit reference" means credit information and credit history information provided to users from the credit information database in forms of electronic and writing;

4.1.13."Credit history" means comprehensive information about borrower on obligation of any outstanding credit and payment and its fulfillment according to law and contract.

Article 5.Principles followed for providing credit information service

5.1.Following principle shall be followed for providing credit information service:

5.1.1.to be independent;

5.1.2.to obtain mandatory consent from borrowers;

5.1.3.to exchange information on basis of law and contract;

5.1.4.information shall be accurate, fair and balanced;

5.1.5.to protect confidential information.

CHAPTER TWO

CREDIT INFORMATION DATABASE, TO BUILD AND USE DATABASE

Article 6.Credit information

6.1.Following information shall be included in individual's credit information:

6.1.1.family name, name of the father /mother/, first name, citizenship registration number;

/The amendment to this sub-paragraph was made according to the law as of  June 3, 2022/

6.1.2.residence address;

6.1.3.if taxpayer, the personal taxpayer identification number;

6.1.4.employment status, official address of the his/her workplace, telephone and e-mail address;

6.1.5.marital status;

6.1.6.loan or payment contract date, contract number and type, currency of the payment;

6.1.7.repayment terms of the credit, schedule, interest rate, regular outstanding credit and repayment amount;

6.1.8.past due repaid or outstanding amount;

6.1.9.amount of credit and repayment that is secured or will be secure by a pledge, deposit and guarantee;

6.1.10.number of state registration and certification of the property, date, holder, family name and father's /mother's/ name, first name, citizenship registration number, residence address, telephone number, e‐mail address and other required information;

/The amendment to this sub-paragraph was made according to the law as of June 3, 2022/

6.1.11.if ever refused any obligation of credit and repayment, reason for the refusal;

6.1.12.if credit and payment obligation and its entitlement to require has transferred into a third party, number, and date of the document on the transfer;

6.1.13.information on classification of the credit and repayment;

6.1.14.conclusion on a borrower's borrowing capacity;

6.1.15.other information which Mongolbank considers necessary to include into credit information related to obligation of the credit and repayment;

6.2.Credit information of legal entity shall include following information:

6.2.1.name in Mongolian and English, and its abbreviation;

6.2.2.number of state registration and registration;

6.2.3.address, telephone number and e‐mail address;

6.2.4.registration number of taxpayer;

6.2.5.family name, father's /mother's/ name, first name, citizenship registration number, residence address, telephone number and e‐mail address of the shareholder who holds more than 25 percent of the company shares;

/The amendment to this sub-paragraph was made according to the law as of June 3, 2022/

6.2.6.parent, associate, subsidiary and their related person as stated in Article 3.1.2 of the Law on Banking of Mongolia; name of the community interested person as stated in article 99.1 of the Company Law, number of state registration and registration number, address, telephone number and e‐mail address;

6.2.7.family name, father's /mother's/ name, first name, citizenship registration number, residence address, telephone number and e-mail address of the Executive Management;

/The amendment to this sub-paragraph was made according to the law as of June 3, 2022/

6.2.8.main business activities and operations;

6.2.9.information stated in article 6.1.6‐6.1.15 of this law.

6.3.Following information held by state agency shall be included in individual or legal entity credit information:

6.3.1.outstanding or past due repaid amount of the social insurance, tax and customs duties;

6.3.2.if credit and repayment was enforced, amount of credit and repayment which repaid under enforcement, execution date of the enforcement;

6.3.3.number and date of the effective sentencing judgment by the court that charged the criminal contempt or fraud ;

6.3.4.information that is not legally prohibited disclose to others from the state administrative body in charge of state registration, energy agency and court decision enforcement authority;

6.4.Credit information provider shall register following information that exchanged with the credit information database:

6.4.1.dates on which credit information was submitted, updated or revised, information about supplier who has provided information or user who received credit enquiry.

6.4.2.purpose and reason of receiving credit reference and its registration number.

Article 7.Source of the credit information

7.1.Following people shall verify whether the credit information is accurate or not:

7.1.1.for information stated in Articles 6.1 and 6.2 of this law, the borrower or information supplier;

7.1.2.for information stated in Article 6.3 of this law, relevant state authorities;

7.1.3.for information stated in Article 6.4 of this law, the credit information service provider.

7.2.It is prohibited for borrower, information supplier, state agency and credit information service provider to intentionally supply, compile and inform false credit information.

7.3.If it considers the source of the credit information is false or incomplete, credit information service provider shall notify to the information supplier immediately for inspection and shall be responsible for the correction of the fault.

Article 8.Information that prohibited to be included in credit information

8.1.Following information are prohibited to be included in credit information:

8.1.1.race, social origin, religion, political party, membership of the non‐government organization and health information of a borrower;

8.1.2.research and information related to trade and business secret of a borrower.

Article 9.Building the credit information database

9.1.Following rules shall be applied to building the credit information database:

9.1.1.credit information shall be compiled only by the legal entity which has obtained credit information operation license on building and using credit information database;

9.1.2.information supplier shall provide any credit information to the credit information database on basis of borrower's consent;

9.1.3.when supplying credit information to the credit information database, a contract on information supply and receipt shall be made between information supplier and credit information service provider whereas they can exchange information upon it;

9.1.4.only information stated in Article 6 of this law can be collected as input to credit information database;

9.1.5.credit information shall be compiled by methods and ways which is permitted in this law;

9.1.6.credit information shall be enriched and updated regularly;

9.1.7.bank, non-bank financial institutions and savings and credit cooperative shall make contract on information supply and receipt with a credit information provider, which has a license obtained from Mongolbank, and obliged to exchange information.

9.2.It is prohibited to obtain information from media and any person other than information provider and insert it into the credit information database.

9.3.It is prohibited to export the credit information database to outside of Mongolia or to transfer it to foreign country without a permission from Mongolbank.

Article 10.Use of credit information

10.1.User shall use credit information for the following purposes:

10.1.1.state agency shall receive information required for executing its rights and duties provided by law and shall use it only for official use;

10.1.2.lender shall receive and use credit information in order to assess credit risk;

10.1.3.borrower shall receive and use credit information, which only concerned to itself for the purpose of monitoring its credit and repayment status and manage the finance effectively.

10.2.It is prohibited to use credit information for information than as stated in article 10.1 of this law.

Article 11.Providing credit reference

11.1.Credit reference shall cover last six years of credit information for a borrower and it shall be provided only to a user.

11.2.User shall apply to credit information service provider by an approved application form expressing its request on credit reference.

11.3.Credit information service provider shall provide reference only within the scope permitted by legislation and contract.

11.4.Credit information service provider shall use computer software that is able to acquire the credit reference.

11.5.Rights to receive credit reference can be transferred only to a registered user in accordance with a power of attorney that satisfies the legal requirement and otherwise it can't be transferred to a third party.

11.6.Name of the information supplier who initially supplied the information to the credit information database, residence address, telephone, e-mail address, date of information supply and last updated date of the information shall be stated in the credit reference.

11.7.Whenever credit reference issued to anybody from the credit information database, name of the credit reference receiver and its purpose shall be added into database wherein it shall be enriched.

11.8.Regulation on providing credit reference from credit information service provider for its authorized person as provided in Article 84.1 of the Company Law or shareholder, shall be established by Mongolbank.

Article 12.Service fee

12.1.Credit information service provider shall have a right to receive service fee, and the service fee shall be set in compliance with operational cost, demand and supply and shall be based on Article 23.4 of this law.

12.2.Borrower is entitled to address to credit information service provider and to receive its own reference from the credit information database once in a year, for free; and in other circumstances, a borrower is required to pay service fee based on a contract.

Article 13.Contract terms

13.1.Credit information service provider is mandatorily required to include following terms in the contract with information supplier and users for providing and receiving information:

13.1.1.name of the information supplier or user, address, account number in a bank;

13.1.2.contract duration, terms for amending, terminating and revoking the contract;

13.1.3.whether a consent is obtained by the borrower;

13.1.4.type of the credit information, volume, period, regarding provision and use of credit information;

13.1.5.regarding update and modification of credit information;

13.1.6.non-disclosure of credit information confidentiality, to not disclose to a person who hasn't authorized, how to compensate the damage which arisen from not fulfilling the obligation;

13.1.7.regulation on providing and receiving credit reference;

13.1.8.duties and responsibilities of the contract parties;

13.1.9.on complain and dispute resolution.

CHAPTER THREE

ACTIVITIES OF THE CREDIT INFORMATION SERVICE PROVIDER AND

ITS RIGHTS AND DUTIES

Article 14.Activities of the credit information service provider

14.1.Credit information service provider shall conduct following activities:

14.1.1.to collect information stated in Article 6 of this law, which is related to borrower, and to build the credit information database;

14.1.2.to process credit information which was collected to the credit information database, to develop and sale credit reference and other products in compliance with the customer's demand and necessity;

14.1.3.to set rating on a borrower's borrowing capacity;

14.1.4.to perform economic analysis and market research based on credit information;

14.1.5.other service related to credit information which permitted by Mongolbank;

/This sub-paragraph was annulled according to the law as of June 17, 2022 and shall enter into force on January 1, 2023/

14.2.Credit information service provider is prohibited to conduct any other business activities other than stated in Article 14.1 of this law.

/This paragraph was modified according to the law as of June 17, 2022 and shall enter into force on January 1, 2023/

Article 15.Prohibited activities for credit information service provider

15.1.Credit information service provider is prohibited to conduct following activities:

15.1.1.to disseminate, disclose or use information accumulated in the database except provided by law by credit information service provider, its shareholder, authorized person and an employee;

15.1.2.to conduct a false and misleading advertising and to provide false information.

Article 16.Rights and duties of credit information service provider

16.1.Credit information service provider shall have following rights:

16.1.1.to build credit information database, and to process, preserve, safeguard and use credit information as stated in credit information legislation;

16.1.2.to provide credit information with fee unless stated in Article 22.1.1 of this law;

16.1.3.to review the contents of the information which supplied by information supplier, verify the information that might be doubtful, uncertain and false, if it does not satisfy the requirement, refuse to receive and require them to resend;

16.1.4.to require and examine the document that proves whether the applying person is information supplier or user or not;

16.1.5.to monitor the contract implementation by receiving and reviewing the statement from supplier or user of the information, who entered the contract on receiving or providing the information, on the use of credit information.

16.2.Credit information service provider shall have following duties:

16.2.1.to securely preserve and safeguard credit information of a borrower, to update and to process according to law;

16.2.2.to provide a document certifying the rights to receive information from the credit information database to individual or legal entity who entered into a contract and to register as a user;

16.2.3.to provide credit reference to a user only as provided by this law;

16.2.4.to take all required measures to prevent information disclosure to an unauthorized person by safeguarding the credit information and improving the security regularly.

Article 17.To input credit information into the credit information database

17.1.Information supplier follow following principles when inputting credit information into the credit information database:

17.1.1.credit information shall be correct, accurate, substantive, complete and comprehensible;

17.1.2.information shall be permitted by legislation;

17.1.3.to regularly and timely update the credit information every time amended;

17.1.4.information shall be used only for the purpose provided by this law;

17.1.5.to use techniques, equipment, and computer software that is able to safeguard the credit information confidentiality to be supplied;

17.1.6.information supplier shall supply credit information into the credit information database based on borrower's consent.

17.2.Unless it is permitted by law, information supplier is prohibited to supply credit information to the credit information database.

17.3.Information supplier shall supply credit information in forms of electronic or writing to the credit information service provider, using approved computer software according to a contract for providing and receiving information.

17.4.Whenever credit information is supplied, both information supplier and credit information service provider shall execute electronic or written document mutually that can prove the information hand-over and shall document it.

Article 18.To modify, update and process the credit information

18.1.If any amendment made for credit information which already supplied into credit information database, information supplier shall deliver the amendment and revision to credit information service provider within three working days.

18.2.When credit information service provider receives amendments and revisions stated in Article 18.1 of this law, it is required to add the amendments and revisions immediately and to update the database.

18.3.Credit information service provider shall organize continual actions to classify the processed credit information, to arrange credit reference and other products for the sale to users, and to review substantiveness and accurateness of the credit information.

Article 19.To preserve, safeguard and archive the credit information

19.1.Credit information service provider shall preserve the credit information which accumulated in credit information database for 10 years period from the date of receipt in the database.

19.2.Credit information service provider shall provide and ensure the confidentiality, safety and security of the information which is preserved in its credit information database.

19.3.The credit information service provider shall be responsible for any damage arisen from failure to ensure safeguarding of the credit information confidentiality according to the standards set by Mongolbank.

19.4.If period stated in Article 19.1 of this law ends, the credit information shall be transferred to the Mongolbank.

CHAPTER FOUR

RIGHTS AND DUTIES OF THE INFORMATION SUPPLIER, USER AND BORROWER

Article 20.Rights and duties of information supplier

20.1.Information supplier shall have following rights:

20.1.1.to require from credit information service provider to ensure the security and safeguarding of the credit information confidentiality;

20.1.2.to require from credit information service provider to reflect the amendments and revision made for credit information based on a source and to process and enrich the credit information timely;

20.1.3.to supervise on not inserting any false or misleading addition to the information  transferred into the credit information database;

20.1.4.to request and cooperate with a borrower and other relevant authorities if it is inevitably necessary to clarify and examine the information because of a doubtful situation regarding the information source of the supplied information.

20.2.Information supplier shall have following duties:

20.2.1.to verify the accurateness of the credit information and to supply substantive, specific and in conformity with information source to the credit information database;

20.2.2.to fulfill the requirements set in this law when exchanging the credit information;

20.2.3.to take immediate action to revise, complete and amend if the credit information supplied was incomplete or erroneous;

20.2.4.to not disclose information which is referred to as the borrower's confidential information except stated in Article 6 of this law.

Article 21.Rights and duties of a user

21.1.User shall have following rights:

21.1.1.to require credit reference to include information which is accurate, substantive, certain and in conformity with the source;

21.1.2.to require from the borrower, information supplier or credit information service provider to revise and update immediately if the credit information is plainly false;

21.1.3.to demand compensating the damage if any damage arisen from intentionally providing false information.

21.2.User shall have following duties:

21.2.1.to use the credit reference only for the purpose that is permitted by law and a contract;

21.2.2.to inform to the lender or the credit information service provider immediately and to demand revision as soon as possible if known that information reflected in credit reference is false, misleading or incomplete;

21.2.3.to keep information confidentiality which reflected in credit reference and to not transfer information to a third party;

21.2.4.to notify to the lender, information supplier and credit information service provider if it is considered necessary to be examined because the information in the credit reference is doubtful or fabricated.

Article 22.Rights and duties of borrower

22.1.Borrower shall have following rights:

22.1.1.to receive its own credit reference from the credit information database whenever it deemed necessary and review it, and to receive the credit reference for free once in a year;

22.1.2.to require from information supplier or credit information service provider to update the information in case the information in credit information database is inaccurate or incomplete.

22.2.Borrower shall have following duties:

22.2.1.to present the information related to the credit information which is provided in Article 6 of this law to lender;

22.2.2.to notify the legal authority immediately if there is any illegal amendment in the credit information.

CHAPTER FIVE

TO ISSUE, SUSPEND AND REVOKE LICENSE TO CONDUCT CREDIT INFORMATION OPERATION

Article 23.To issue license to conduct credit information operation

23.1.License to conduct credit information operation shall be issued by Mongolbank.

23.2.Applicant who applies for license to conduct credit information operations shall submit the following documents to Mongolbank besides documents stated in Article 5.1.3 of the Law on Permit:

/In this paragraph, the part "besides stipulated in Articles 11.1.1 and 11.1.2 6 of the Law on Licensing of Business Activities" was amended as "besides documents stated in Article 5.1.3 of the Law on Permit" according to the law as of June 17, 2022, and it shall enter into force on January 1, 2023/

23.2.1.names, copies of the identity document of a citizen, telephone numbers and e-mail addresses of the management employees and shareholders of a credit information service provider;

23.2.2.percentage and quantity of the invested share capital of each shareholder who holds more than five percent of the share capital in the legal entity;

23.2.3.professions, educations, work experiences, documents that prove whether he/she ever engaged with any crime and he/she doesn't have any overdue credit or repayment obligation of the management employees of the credit information service provider;

23.2.4.business plan;

23.2.5.documents that prove the applicant have appropriate information system software that can satisfy all requirements on safeguarding the security of the credit information database;

23.2.6.regulation on exchanging information with credit information database from user, and sample contract which stipulated their rights and duties in detail;

23.2.7.ethical code, including principle and responsibilities on internal and external activities of the organization;

23.2.8.document that proves the minimum requirement on capital which set by Mongolbank.

23.3.Mongolbank shall receive the application stated in Article 23.2 of this law, along with relevant accompanying documents, decide on whether to issue a license to conduct credit information operation and notify to applicant its decision in written form within 30 days from receipt date.

23.4.Mongolbank shall approve the regulations on issuing license to conduct credit information operation, building credit information database, processing, using preserving, safeguarding, transferring of the credit information and setting service fee.

23.5.A person who has no license to conduct credit information operation is forbidden to use the name of "credit information database". 

Article 24.Grounds for rejection to issue license to conduct credit information operation

24.1.Mongolbank shall reject to issue a license to conduct credit information operation for the following grounds:

24.1.1.submitted application and accompanying documents does not meet the requirements stated in Article 23 of this law;

24.1.2.contract of incorporation and the charter are inconsistent with legislation;

24.1.3.not equipped with the techniques, equipment and software that ensures information confidentiality and security as provided by this law, and/or the management employees are not in conformity with the requirements.

Article 25.To suspend the license to conduct credit information operation

25.1.Mongolbank may suspend the license to conduct credit information operation for the following grounds besides the grounds stated in Article 6.1 of the Law on Permit:

/In this paragraph, the part "besides grounds stipulated in Article 13 of the Law on Licensing of Business Activities" was amended as "besides the grounds stated in Article 6.1 of the Law on Permit" according to the law as of June 17, 2022, and it shall enter into force on January 1, 2023/

25.1.1.it shall be suspended until such reorganization procedure ends if credit information service provider is being reorganized in forms of merger, division and separation based on the shareholders' general meeting resolution;

25.1.2.it shall be suspended until the rectification of the breach if did not fulfill actions which required by Mongolbank to satisfy the requirements stated in this law.

Article 26.Grounds for revocation of license to conduct credit information operation

26.1.Mongolbank may revoke a license to conduct credit information for the following grounds besides stated in Article 6.2 of the Law on Permit:

/In this paragraph, the part "besides grounds stipulated in Articles 14.1.1-14.1.5 of the Law on Licensing of Business Activities" was amended as "besides stated in Article 6.2 of the Law on Permit" according to the law as of June 17, 2022, and it shall enter into force on January 1, 2023/

26.1.1.did not meet the requirements set by this law for three months or more;

26.1.2.it was established that its articles of incorporation and other documents, which based the issuance of the license, were false or un-substantive;

26.1.3.intentionally disseminated false and misleading information, or made a false and misleading modification or amendment to the credit information database;

26.1.4.have not commenced any activity for a year since the license receipt;

26.1.5.seriously violated this law and other relevant legislation by using the credit information illegally, and has caused considerable damage to others.

26.2.Reason for revoking the license to conduct credit information operation shall be clearly indicated in the relevant decision.

26.3.Mongolbank shall not receive a reapplication on the request license within six months from the provider that has been revoked the license of the credit information service provider, or has been rejected to issue license.

Article 27.Reorganization or liquidation of the credit information service provider

27.1.Credit information service provider may be reorganized or liquidated based on the shareholders' general meeting decision, and in such case it shall obtain a permit from Mongolbank.

27.2.The following documents shall be submitted to the Mongolbank to obtain a permit on reorganization or liquidation of the credit information service provider:

27.2.1.the shareholders' general meeting decision on reorganization or liquidation;

27.2.2.document covering actions to be taken on how to settle credit information database in order to cease its operation properly, its implementation phases, initiative, form and timing to restructure or liquidate;

27.2.3.estimation on outcomes of the reorganization, the opening balance of the successor if there is any successor of the rights and duties.

27.3.If Mongolbank permits the reorganization of the credit information service provider, it shall transfer the credit information database to the credit information service provider which was created as a result of the reorganization.

27.4.In case of credit information service provider is liquidated, the credit information database shall be transferred to Mongolbank.

CHAPTER SIX

CREDIT INFORMATION DATABASE OF MONGOLBANK

Article 28.Exchange information with Mongolbank database

28.1.Mongolbank shall have the credit information database which compiled from bank, non‐bank financial institutions, other financial institutions which legally permitted to conduct credit operation, state agencies and other business entities, in purpose of ensuring the stability of the financial sector.

28.2.Bank, non‐bank financial institutions, savings and credit cooperative, financial leasing /leasing/ companies and state agencies shall regularly provide the credit information to the Mongolbank information database regardless of individual or legal entity consented or not.

28.3.Information in the Mongolbank credit information database shall be exchanged with other credit information service provider at its written or electronic request, as provided by law and contract.

28.4.Mongolbank shall approve the regulation on exchanging information from the credit information database with credit information service provider.

28.5.It is prohibited for Mongolbank to use credit information database for profit.

CHAPTER SEVEN

RESPONSIBILITIES

Article 29.Liability for the violators of the law

29.1.In case the actions of a civil servant violating this Law have not a criminal nature, they shall be subject to liability specified in the Law on Civil Service.

29.2.Any person or legal entity violating this Law shall be subject to liability specified in the Criminal Law or the Law on Violations.

/This Article was modified according to the law as of December 4, 2015/

29.3.Credit information service provider or its employees shall not be responsible for the accurateness of the credit information provided by the information provider.

Article 30.Entry into force of the law

30.1.This law shall enter into force on January 1, 2012.

THE CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA D.DEMBEREL